Forex Pros – The Canadian dollar climbed against its U.S. counterpart for the second week, reaching a fresh multi-year high after Federal Reserve Chairman Ben Bernanke gave no indication that the U.S. central bank will move to tighten policy anytime soon.
USD/CAD hit 0.9575 on Wednesday, the weekly high; the pair subsequently consolidated at 0.9447 by close of trade on Friday, tumbling 4.27% over the week.
The pair is likely to find support at 0.9400 and resistance at 0.9575, last Wednesday’s high.
In his first ever post-policy meeting press conference on Wednesday, Bernanke said that the central bank, which left interest rates unchanged, “will complete” its USD600 billion bond-buying program by the end of June but indicated that the Fed was in no rush to tighten monetary policy with the jobs market still in a “very, very deep hole.”
Elsewhere, on Thursday, the Commerce Department said U.S. economic growth slowed to a 1.8% annual rate in the first quarter, from 3.1% in the prior three months.
Meanwhile, data on Friday showed that Canada’s economy grew 2.9% year-on-year in February, the slowest annual pace of expansion in a year.
But the Canadian dollar remained well supported as crude oil futures rose 1.5% over the week to USD113.93 a barrel in New York. Raw materials, including oil, account for about half of Canada’s export revenue.
Looking ahead, markets will be looking to Friday’s U.S. non-farm payrolls report to gauge the strength of the jobs market while Canada is also to release official data on employment on Friday.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday, May 2
The U.S. Institute for Supply Management is to publish its manufacturing PMI, a leading indicator of economic health, while Canada is to publish its raw material price index.
Tuesday, May 3
The U.S. is to release government data on factory orders, a leading indicator of production.
Wednesday, May 4
The U.S. is to publish data on non-farm payrolls compiled by payroll processing firm ADP, which leads government data by two days. Meanwhile, the U.S. Institute for Supply Management is to publish its non-manufacturing PMI. The country is also to publish government data on crude oil stockpiles. This data can be a big market mover for the Canadian dollar as crude is the nation’s largest export.
Thursday, May 4
The U.S. is to publish its weekly report on initial jobless claims as well as preliminary data on labor costs and productivity. The country is also to release official data on natural gas inventories. Also Thursday, Fed chair Ben Bernanke is to speak at a public engagement, his comments will be closely watched for any clues to the future possible direction of monetary policy.
Elsewhere, Canada is to publish official data on building permits, a leading gauge of future construction activity. The country will also publish its Ivey PMI, a leading indicator of economic health.
Friday, May 6
The U.S. is to publish key government data on non-farm payrolls as well as data on the country’s unemployment rate and average earnings.
Also Friday, Canada is to publish government data on employment change and the country’s unemployment rate, while Bank of Canada Governor, Mark Carney is to speak; his comments will be closely watched for any clues to the future possible direction of monetary policy.
ForexPros.com
